Question 1

What is a personal loan?

Accepted Answer

A personal loan is a loan that the lenders offer without any security or guarantor. A personal loan can be used for a myriad purposes. You can get a personal loan from Rs. 25000 to Rs 1 Cr. The repayment tenure of a personal loan resides between 1 to 7 years. It is often also called a consumer loan. The beauty of a personal loan is that is disbursed fast and can be used for practically any purpose ranging from holidays to weddings to the down payment of a ome loan etc

The first personal loans in India were disbursed by Citibank in 2001. This was the first time a bank has disbursed personal loans at any degree of scale. This launch was quickly emulated by other foreign banks such as Standard Chartered, HSBC, ABN AMRO etc over the next few years. In a short period of a few years, the Indian private sevtor banks such as ICICI, HDFC Bank and Axis Bank also wamed up to the opportunity. Today, personal loans is among the fastest growing segments in the Indian retail lending landscape. Apart form banks and NBFCs, there are a whole host of fintechs also which are jostling for market share in this segment.

The personal loan interest rate lies between 10 – 36%* per annum, excluding one-time processing fees whihc ranges between 2% to 5%.

Question 2

What is the turnaround time for Fullerton India personal loans?

Accepted Answer

Fullerton India claims to disburse personal loans within 72 hours or 6 days from the approval of the applied loan amount.

Question 3

For what purpose I can avail personal loan from IDBI?

Accepted Answer

To meet unexpected financial difficulties. At IDBI you can avail of personal loans for household buys, your children’s education, hospitalization, or any immediate bill payments. No end usage of funds is restricted. The borrower may even apply personal loan to meet the margin money requirement of a home loan.

Question 4

How can I apply for IDBI Bank personal loan?

Accepted Answer

You can get a personal loan in 3 easy steps.

Get in touch with IDBI- You can call on their phone banking numbers - Toll Free - 1800-209-4324 and 1800-22-1070 (24x7 service).
You can visit their nearest branch.
Receive a call back- Their representative will contact you at the earliest.

Question 5

What repayment methods can be used to repay a Federal bank personal loan?

Accepted Answer

Standing instruction registration at your near branch, internet banking, and automated payment through ECS or mobile banking.

Question 6

How does the credit report impact the Tata Capital personal loan approval?

Accepted Answer

Credit report delivers details on your financial status and your ability to repay a Personal Loan. This helps to evaluate your financial history. A good credit report with a minimum score of 750 will help you take a loan easily.

Question 7

How much time does it takes for the disbursal of Tata Capital Personal Loan?

Accepted Answer

After the submission of all documents and the verification process is completed, it generally takes about 72 hours for the loan amount to be credited to your bank account.

Question 8

Is a co-signor/guarantor/co-applicant required for a personal loan?

Accepted Answer

Usually, a personal loan is granted without needing a guarantor, co-signer, or co-applicant. In effect, the waiver of any requirement of a guarantor is one of the characteristics of a personal loan. Typically, lenders ask for guarantors for larger ticket loans such as home loans, loan against property etc. This makes a personal loan less cumbersome to get. It is after all, difficult and time-consuming to get someone to agree to be a guarantor. This feature of a personal loan is one of its selling points apart from the fact that personal loans can be used for practically any purpose. However, some lenders may ask for a guarantor for a personal loan if the applicant has a low credit score.

For more information on guarantors, read this thread on guarantors

Question 9

What are the special benefits offered by Fullerton India to existing customers?

Accepted Answer

The existing customers of Fullerton India can appreciate additional benefits on the loan processing time and provides loans at lower interest rates than others. The loan applicants are also eligible for a pre-qualified top-up on the outstanding principal amount.

Question 10

How do I pick the best deal for a personal loan?

Accepted Answer

Here are some tips to help you get the right deal on your personal loan.

Interest Rate: Banks offer different interest rates directly affecting your EMI. An online EMI calculator can help you find the EMI based on your loan amount, interest rate, and repayment tenure.

Choose Right Lender: The terms and conditions differ for Banks, NBFC, Fintech, etc. Hence you must read the T&Cs of different firms before finalizing the lender.

Check Your Credit Score: Before applying for a personal loan, check your credit report and ensure you have a good credit score. The loan approval and disbursal process are quick for people with high CIBIL scores..

Overall Charges: There are multiple costs associated with a personal loan, like processing fees, late fees, foreclosure charges, etc., which you must know before submitting a loan request.

Authenticity of Lender: You must check online reviews of a lender before selecting and proceeding with your personal loan request. You can ask your connections or research online to ensure the lender is legit.

Question 11

What are the documents required to apply for a personal loan?

Accepted Answer

List of documents required to apply for a personal loan include:

PAN card
Identity and address proof
Photograph
6 months bank statement
Income proof

Borrowers who are salaried must submit the following documents:

Whether you are a salaried, you must submit the below listed documents

Identity Proof (Any One)
- Aadhar Card
- Passport
- Driving License
- Voters ID Card
- PAN Card
Address Proof (Any One)
- Aadhaar Card
- Passport
- Voter ID Card
- Driving License
- Lease Agreement
- Rent Agreement
- Electricity bill
- Landline telephone bill
- Piped gas bill
Proof of Age (Any One)
- Aadhaar Card
- Passport
- PAN Card
- Driving License
Two recent, coloured, passport size photographs
Income Proof (All)
- Latest Salary slip
- Form No.16, duly authenticated by employer
- 6-month bank statement in which salary is credited
- Income Tax Return
- Appointment letter

Question 12

Which factors determine the loan amount eligibility of the personal loan applicants?

Accepted Answer

The loan amount eligibility of the personal loan applicants depends on their monthly income, current monthly obligations including credit card debt, and the policy of the company at the time of submission of the loan application.

Question 13

How can I repay my personal loans availed from IDBI Bank?

Accepted Answer

Personal loan applicants can easily repay their EMIs by putting a mandate or standing instruction to the debit of the savings bank account (salary account) with IDBI Bank on a fixed date predetermined by the loan applicant.

Question 14

Will a Personal Loan hurt my CIBIL score?

Accepted Answer

When you take a personal loan and pay it regularly with no missed payments, it improves your CIBIL score. However, a missed payment can casue your score to drop.

Question 15

Can I foreclose my personal loan availed from Fullerton India?

Accepted Answer

Yes, you can foreclose your personal loan availed from Fullerton India. The Fullerton India prepayment charges range between 0-7%.

0 to 17 EMIs (fully paid)- 7% of principal outstanding
18 to 23 EMIs (fully paid)- 5% of principal outstanding
24 to 35 EMIs (fully paid)- 3% of principal outstanding
36 or more EMIs (fully paid)- NIL

Foreclosure penalties shall not be charged on all floating-rate term loans sanctioned to individual borrowers.

Question 16

Can self-employed professionals not having savings account with IDBI Bank can avail of personal loan from them?

Accepted Answer

No, self-employed professionals not having a savings account with IDBI Bank cannot avail of personal loans from them because IDBI offers personal loans to self-employed professionals having an asset or liability relationship with the IDBI bank.

Question 17

What is the processing time/TAT/turnaround time for a personal loan?

Accepted Answer

The processing of a personal loan is between 1 days and 7 days from the time your application is 'logged-in' to when it is disbursed by the lender.

Lender	Expected turnaround times(hours)
Bajaj	24
Tata Capital	72
HDFC Bank	48
IDFC Bank	24
ICICI Bank	72
Axis Bank	72
Yes Bank	72
Fullerton	24
Standard Chartered Bank	24
Kotak Mahindra Bank	96
RBL Bank	96
Indusind Bank	96

In reality, however, the processing time, especially from application date to disbursal date is much longer and could be as long as 7-12 days. This is even more so, if there are some credit related approvals to be obtained (deviations from lender's standard policy). In such cases, the procesing time could be much higher. Such deviations are common-place and this is exactly what fintechs such as Saral Credit are trying to challenge.

Question 18

What is the tenure of a personal loan?

Accepted Answer

The personal loan tenure is the time gap between the date of loan disbursal and the date of the last EMI payment, it is the duration for which money is provided by the lenders. The minimum repayment period is 12 Months, and the maximum is 84 Months generally given by select lenders.

For more details on personal loan tenure, follow this link.

Question 19

How do I part-close/foreclose/repay/close my personal loan?

Accepted Answer

Personal loans can be overdraft or term loans and can be closed or partially closed whenever you want. On a personal loan, banks typically levy part-closure/foreclosure fees. Most Indian banks provide you with the choice of foreclosing on your personal loan.

The majority of loans also allow for partial payback. You can pay in parts as much as you desire.

Question 20

What is the minimum income that I need for a personal loan in India?

Accepted Answer

Income is an important factor in evaluating a personal loan request. You must note that the minimum income limit varies from one lender to another. A lower-income borrower will always be a risky asset for lenders. A borrower with a higher income can qualify for a higher personal loan amount. Our study has shown that the minimum salary criteria for salaried people is a net take home of Rs. 12,000 per month.

Question 21

Is it advisable to take a personal loan?

Accepted Answer

It entirely depends upon your choice. The advantages and disadvantages of a personal loan can help you in decision-making.

Advantages of Personal Loan:

Use for any purpose you want.
Quick processing
Low-interest rate & Processing Fees
No security/guarantor required

For more advantages of taking a personal loan, read this link

Disadvantages of Personal Loan:

Your credit score is affected if repayment is skipped
Interest rates are higher than other credit facilities.

For more on this topic, read this article

Question 22

Can I take a personal loan from 2 banks?

Accepted Answer

Yes, you can apply for a personal loan from multiple lenders. However, the approval of your loan will entirely depend upon your capability to repay the loans on time.

Question 23

Is insurance mandatory for a personal loan?

Accepted Answer

No, insurance isn't a necessity for a personal loan. However, a personal loan insurance helps you secure the family if you meet with a mishap without clearing the loan.

Question 24

How is personal loan eligibility calculated?

Accepted Answer

The eligibility for personal loans majorly remains the same for all lenders/banks. However, there might be a minor fluctuation in the eligibility criteria in terms of salary. Yet below are the basic eligibility criteria:

Employees of private limited companies or PSUs
Individuals between 21 and 60 years of age
Individuals who have had a job for at least two years, with a minimum of 1 year with the current employer
Income criteria
Based on the above criteria, you can calculate your eligibility.

To know more about personal loan eligibility calculations, follow this link.

Question 25

How can I reduce the EMI on a personal loan?

Accepted Answer

Taking an overdraft facility is the best way to reduce the personal loan EMI. Interest will only be charged on the amount you draw from the account. However, the interest will be applied on a daily basis.

Question 26

How do I cancel my personal loan after the loan is disbursed?

Accepted Answer

No, you cannot cancel your personal loan request once the amount is disbursed to your account. You have the time to cancel your personal loan request before the loan amount is deposited.

Question 27

What are the reasons for the rejection of a personal loan?

Accepted Answer

The most common reasons behind the rejection of a personal loan include:

Low Credit Score
Low Income
Inaccurate Details in Application
Job Instability
Too Many Pending Loans

For more on top personal loan reject reasons, click the link.

Question 28

Can I take an overdraft/OD on my personal loan?

Accepted Answer

Yes, some lenders/banks offer you a Personal Loan overdraft facility where you can withdraw an amount at any time and repay it at your convenience. All this with no pre-payment penalty!. Such facilities are offered by Bajaj Finance, Tata Capital, IDFC Bank among others. Such loans are usually offered at a slightly higher rate than normal loans.

Question 29

What can I use a personal loan for?

Accepted Answer

Personal loans can be utilized for any purpose as there are no restrictions. It can be used for practically anything, including paying for travel, family occasions, and medical expenses. However, the borrowed amount cannot be used for trading or other capital market operations.

Question 30

When should I opt for a personal loan?

Accepted Answer

A personal loan is the easiest loan you can get with limited documentation and quick disbursal. Here are the common occasions when you can apply for a personal loan.

Debt Consolidation: People with multiple loan accounts always prefer a single account that is easy to handle and simple to manage. Hence many people look for a personal loan to settle their ongoing loans and bring them under one umbrella.

Home Renovation: People look for additional funds when renovating their homes. Usually, their expenses outrank their budget, and personal loans help them continue the home renovation without a halt.

Holiday With Family: A personal loan is the first preference for those who plan a vacation with their family. Interestingly, they apply for a personal loan to sponsor their foreign vacation.

Family Wedding Event: Often, people fail to budget their marriage and fall short of funds. Personal loan helps them execute the entire wedding without a financial crisis.

Higher Education: Many people borrow money via a personal loan to fund their higher education. Educational loans only cover tuition fees, but it doesn't cover the hostel fees, travel fees, and other monthly expenses.

Unforeseen Medical Emergencies: Medical emergencies can happen to anyone, and a personal loan serves as the best option for high-cost treatment.

Question 31

What is the maximum amount of Personal Loan I can get?

Accepted Answer

The loan amount is the principal you draw from the bank as a short-term loan and settle your purpose. It's important to note that the loan amount excludes the processing charges, late penalties, and other associated charges that apply during the loan disbursal process. The maximum loan amount depends upon several factors, including borrowers' creditworthiness, the purpose of the loan, loan duration, income, and a few other factors.

Another factor considered during the personal loan approval is your ongoing loan accounts. If you have a high income but are already paying a specific amount as EMI, your eligibility may drop.

To check the maximum personal loan eligibility, follow the link.

Question 32

What is the tax treatment on a personal loan?

Accepted Answer

Usually, the principal and interest payments made on a personal loan are not tax deductible, but they are deductible if you use the money for home improvements or as a down payment for a home loan.

For more on the tax treatment of a Personal Loan, click the link in this thread.

Question 33

Can I transfer a personal loan from one bank to another?

Accepted Answer

Like any other loan balance transfer procedure, a personal loan can be moved from one lender to another. The same action should be taken if the new lender provides a loan at a cheaper interest rate or if the new lender is able to offer usable funds by extendin the tenure of the loan.

Question 34

Are personal loan interest rates fixed or floating?

Accepted Answer

A loan with a fixed rate will have the same interest rate for the duration. In contrast, a floating rate loan will have interest rates that fluctuate according to the state of the market.

Usually, the interest rates on personal loans are fixed and are calculated on a diminishing balance basis.

Question 35

What is a top-up on a personal loan?

Accepted Answer

A top-up is a loan facility on an existing loan which enable the borrower to borrow from the lender upto the extent of principal reduction of the origina loan. You may be eligible for a top-up if you have been making timely payments on your current personal loan. Compared to a new personal loan application, a top-up requires fewer documents.

Question 36

What is an Instant Personal Loan?

Accepted Answer

Instant personal loans are the specific persoanl loan type that doesn't require heavy documentation and gets approved quickly. The best part of getting an instant personal loan is that no collateral or guarantor is required. Instant personal loans are often called quick loans.

The distinguishing feature of an instant personal loan is a Paperless Digital Process. When applying for a regular personal loan, you might require submitting some paper/documents to the bank/lender. This is rendered paperless in the case of an instant personal loan. To know more about what is an instant personal loan, click on the link

Question 37

What is a pre-approved Personal Loan?

Accepted Answer

A pre-approved personal loan is a loan that is approved for specific individuals with good credit ratings. Banks/lenders always sort the candidates with good credit scores and offer them low-interest rate personal loans with less or without any documentation.

Such loans are pre-approved by the bank and NBFC’s, making them quick and easy to disburse. A pre-approved personal loan is also a good practice to boost the sales of loan products. These pre-approved loans come with minimal (even zero) documentation, as most of the credit checks are already done by the bank before offering you the desired personal loan. For more on pre-approved personal loans, click this link.

Question 38

Can you get a Personal Loan without a CIBIL score?

Accepted Answer

People who are new to credit have very limited options for getting personal loan. Most of the time financial institutions reject them or have criteria which make it difficult to get a personal loan.

Banks: Most of the banks have personal loan options for this segment. However, they would insist on high salary and insist that the applicant work ina top notch company with at least1-2 years of job stability.

NBFCs: Most NBFCs offers personal loan for no credit history profiles. But they offer very low loan amounts.

FinTech: Fintechs have found this segment under-served and with huge opportunity and started offering loans to them. Some of them like Dhani, Stashfin, MoneyTap and others offer personal loans to customers with no credit score.

For more on personal loans without CIBIL score, follow this link.

Question 39

What happens if I don't pay my personal loan?

Accepted Answer

If you fail to repay your personal loan EMI, it's better to pay it as soon as you remember it. However, if you have missed out due to any unexpected financial emergency, you can inform the bank and negotiate an alternative.

However, with every missed EMI, your CIBIL score is affected. Moreover, late charges /penalty is imposed on the missed EMI. You may even ladp up in legal issues as a result of the default.

Question 40

Can I apply for a personal loan jointly with my spouse?

Accepted Answer

You can apply for a joint personal loan with your spouse or parents. The interesting point is that if you apply for a joint personal loan, you can qualify for a higher loan amount. This is because you and your spouse's income are cumulatively considered to process your loan request. There are multiple reasons for selecting your spouse as a co-applicant.

Increase your personal loan amount.
If you don't have a good credit score, your spouse's score can be considered to approve your personal loan request.
Co-applicant helps you with quick approval as it assures the bank of repayment if you fail to do so.

Personal Loans Frequently Asked Questions (FAQ)